The Memory Crash Has 4 Big Stocks Down 30% or More From Their Highs. I'd Buy 2 of Them.

Memory and storage stocks have had a brutal stretch. Micron Technology (NASDAQ: MU), Sandisk (NASDAQ: SNDK), Western Digital (NASDAQ: WDC), and Seagate Technology (NASDAQ: STX) have been falling for days, mostly without company news. As of this writing, Micron and Seagate both trade about 35% below their 52-week highs, Western Digital about 42%, and Sandisk about 53%.

The market is selling all four as one trade. But these are three different businesses (DRAM and high-bandwidth memory, NAND flash, and hard drives), and the risks behind their earnings look nothing alike.

With all four down hard, I'd buy two of them and leave the other two alone.

Image source: Getty Images.

1. Micron: the broadest business, the cheapest stock

Micron sells DRAM, NAND flash, and the high-bandwidth memory (HBM) that sits next to AI (artificial intelligence) accelerators (the widest lineup of the four). And its results have gone vertical. Revenue in the company's fiscal third quarter (ended May 28, 2026) more than quadrupled year over year to $41.5 billion, up from $23.9 billion a quarter earlier. Net income reached $28.2 billion. And management's fiscal fourth-quarter forecast calls for about $50 billion of revenue at a gross margin of approximately 86%.

The stock fell hard anyway. At about $821 per share as of this writing, Micron trades at roughly 6 times analysts' consensus earnings forecast for the coming year. The market, it seems, is already assuming these earnings don't last.

2. Sandisk: the biggest swings in both directions

Sandisk is the purest memory bet of the group. It sells NAND flash (the storage chips in phones, laptops, and AI data centers), and surging prices have rebuilt its earnings almost overnight. Revenue in its fiscal third quarter (ended April 3, 2026) rose 251% year over year to $5.95 billion, and earnings per share came in at $23.03. A year earlier, the company was losing money.

But earnings this new depend on prices staying at levels the industry has rarely sustained, and the same leverage works in reverse. To the company's credit, Sandisk has signed five supply agreements that lock customers into firm multi-year commitments, a structure designed to soften future downturns. It also carries no debt.

Still, with results expected next week, I'd rather watch this one from the sidelines.

3. Western Digital: the same boom at a higher price

Western Digital makes hard drives for cloud data centers, and demand is not its problem. Fiscal third-quarter revenue rose 45% year over year to $3.3 billion, cloud customers accounted for 89% of it, and management guided for roughly 40% growth in the fiscal fourth quarter.

The problem is the price. Much of Western Digital's recent profit isn't from hard drives at all: $2.7 billion of its $3.2 billion in fiscal third-quarter net income was a pre-tax paper gain on the stake it kept in Sandisk when the two companies separated in 2025. And against analysts' consensus forecast for the next 12 months, the stock trades at about 30 times earnings. That's a higher price than its direct competitor gets, on the same boom.

4. Seagate: a strong quarter, just reported

Seagate, the larger of the two big U.S. hard drive makers, has the group's freshest numbers. Its fiscal fourth quarter, announced Tuesday, featured revenue of $3.6 billion, a non-GAAP (adjusted) gross margin of 52.7%, and adjusted earnings per share of $5.71. Full-year revenue rose 34% to $12.2 billion. And free cash flow hit a record $3.1 billion.

Management guided for about $4.1 billion of fiscal first-quarter revenue with adjusted earnings per share of about $7.30. And in April, it said nearly all of its data-center drive capacity was already committed through calendar 2027.

The report landed after Tuesday's close, hours after the stock had already slid 8.5% in the day's sell-off. At the pace its guidance implies, shares trade at about 26 times earnings, and the company pays a dividend, currently $0.74 per share each quarter.

The two I'd buy

I'd buy Micron and Seagate.

Both sell products AI data centers are short of. Both back their earnings with contracts or guidance the market can check within weeks. And both trade at arguably reasonable prices next to the earnings they're already delivering.

The two I'd avoid are the ones whose numbers need the most explaining. Sandisk's earnings arrived fast, and they lean hardest on spot pricing holding into 2027. Western Digital sells the same drives as Seagate at a higher multiple of next year's earnings, and much of its recent profit is investment gains.

Of course, memory is cyclical. When the cycle turns, all four of these stocks could fall together -- a good reason to keep positions modest. But for anyone set on owning the group through the swings, I think the broadest product lineup and the freshest numbers are the right places to be. Right now, those belong to Micron and Seagate.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Western Digital. The Motley Fool has a disclosure policy.